A convention in progress at San Francisco’s huge Moscone Center. (Image: Moscone Center)

The laws of supply and demand that led to a big surge in San Francisco hotel rates could soon shift in favor of supply, as a major expansion project at the city’s Moscone Convention Center will likely hurt lodging demand.

The trade publication Meetings and Conventions reports that major work on the Moscone Center is due to begin in April and will continue for two years. The project has local hoteliers “revising their strategies to attract other business in the interim,” the publication said. The center usually hosts some 70 major gatherings each year such as the huge Dreamforce event put on by Salesforce, Oracle’s OpenWorld and many others.

The Moscone Center said on its website that the Moscone North and South sections of the complex will be closed from April through August of this year. But the center is not shutting down completely: “Moscone West will remain open and is fully booked,” the Moscone Center said.

The $500 million expansion project was considered necessary to accommodate the increasing demand for large conventions in downtown San Francisco. The Moscone Center estimated that San Francisco is losing $2.1 billion in convention spending from 2010 through 2019 “as conventions look for larger and more contiguous exhibition space” found in other big convention cities like Las Vegas or Chicago.

Meetings and Conventions reports that the project has thus far led to the cancellation of 11 conventions, and San Francisco Travel, the city’s destination marketing company, predicts the work could cost the city 490,000 lost room nights over the next two years.

San Francisco hotels have been going through a major boom in business over the past several years as heavy demand from conventioneers, business travelers and tourists outpaced room supply. The city’s average annual hotel occupancy rate jumped from 65.8 percent in 2011 to more than 84 percent in 2015 and 2016.

But now the pressure is on hotels and the visitor industry to keep filling those rooms as conventions play a smaller role. Hoteliers are planning to extend their marketing to new types of visitors who might have otherwise stayed farther away from the city center, and to attract smaller groups instead of giant convention crowds.

According to data from Trivago, the average online rate for hotel rooms in San Francisco during February was $228 a night, down 5.8 percent from a year earlier. Whatever happens, hotels are expecting a return to the boom years after the convention center work is finished in 2019; the entire facility is said to be fully booked during the post-construction months.

Any blip in convention demand isn’t deterring an ongoing expansion of hotel capacity in San Francisco. For example, Sir Richard Branson’s fledgling Virgin Hotels just announced it plans to open a newly built San Francisco property this summer. Located next to the Moscone Center at 250 Fourth Street, South of Market, it will be the second Virgin property; the first opened in Chicago in January 2015. Others are under construction in Dallas and New York.

What’s your favorite San Francisco hotel? How much did you pay for it? Please leave your comments below.

Apparently Uber has determined that plenty of potential customers won’t follow through and summon a ride when their app indicates that surge pricing is in effect in their area. So the ride-sharing giant is changing the way it displays fares.

The company is calling them “upfront fares,” which basically means that any surge multiplier will be factored into the estimated fare that the app displays.

Uber said it started testing this approach a couple of months ago with its UberX service in select cities, and now more will be on the way.

“Upfront fares are calculated using the expected time and distance of the trip and local traffic, as well as how many riders and nearby drivers are using Uber at that moment,” the company said. “And when fares go up due to increased demand, instead of surge lightning bolts and pop-up screens, riders are given the actual fare before they request their ride.”

Taking Uber from Manhattan to Newark Airport (Photo: Chris McGinnis)

This pricing model has been in use with the firm’s uberPOOL service when it launched two years ago. “Knowing how much a ride will cost in advance is clearly something riders appreciate,” Uber said. ”Today, uberPOOL accounts for over 20 percent of all rides globally.”

Air fares worldwide are going down – but just a little. With fuel prices crashing, you’d think air fares would follow suit. And hotel prices just keep going up. What’s behind the relatively high and increasing levels of business travel costs? One word: demand.

Travel demand is booming, according to a pair of new reports – and that means airlines and hoteliers have little incentive to use price reductions as a way to stimulate business.

The International Air Transport Association – a trade group for the world’s airlines – said that global demand for air travel in 2015 jumped 6.5 percent over the previous year, a result that it said was the strongest since the world started pulling out of the Global Financial Crisis in 2010; that number was also well above the industry’s 10-year average growth rate of 5.5 percent.

IATA noted that after adjustments for the stronger U.S. dollar, worldwide air fares dropped by about 5 percent last year from 2014.

Business people know that when demand outpaces supply, it puts upward pressure on prices. And that’s just what happened in the airline industry: While demand was up 6.5 percent, the number of available seat-miles operated by the world’s airlines last year rose only 5.6 percent over 2014. As a result, the industry’s load factor (i.e., percentage of seats filled) rose to a record level of 80 percent globally and to 85 percent in the US.

Meanwhile, road warriors who aren’t planning to trim their travel schedule this year should probably budget a bit more for hotel stays: In its latest forecast on the U.S. lodging industry, PwC US – which tracks industry metrics — said the country’s strong economic fundamentals are pointing to continued heavy demand for hotel rooms.

The aerie atop the new Hyatt Herald Square in NYC (Photo: Hyatt)

According to PwC’s analysis, the percentage of occupied rooms at U.S. hotels is expected to hit 65.7 percent this year. That’s up only two-tenths of a point from 2015, but it represents the highest occupancy rate the industry has seen since 1981.

If demand is surging, what about supply? The number of hotel rooms in the country is expected to increase in 2016, but only by a meager 1.9 percent, PwC said. As a result, it is forecasting a 5.2 percent increase this year in average daily room rates. And that’s coming on top of a 4.4 percent increase in 2015 over the previous year.

“We expect peak occupancy levels in select markets should give hotel operators the confidence to meaningfully increase average rates, although the strength of the US Dollar may have an impact, particularly on gateway markets,” PwC said.

A room at San Francisco’s new Hotel Zephyr runs $999 per night during Super Bowl (Photo: Hotel Zephyr)

Hotel rates can vary wildly based on demand. But have you ever heard of 400% increases?

Last week TravelSkills took a look at 4-5 star hotel rates in the Bay Area over Super Bowl weekend (February 7, 2016) and compared them to rates in late August of this year.

Wow. What a difference!

Here’s what we found out:

During Super Bowl weekend, most big brand hotels are already sold out and are not even quoting rates. For example, all Marriott, Hilton and IHG hotels in San Francisco are sold and not accepting reservations.

You can still stay at these hotels if you want, but you’ll have to be well-connected or buy a shockingly pricey package to do so.

Typically, big hotels are bought out by large corporate sponsors, or sold off in blocks to travel travel agents that package air, hotel, transfers, parties and of course, game tickets.

Here’s an example of what a fan would pay for four nights at the Marriott Marquis in San Francisco, plus Super Bowl tickets, transfers, and parties, but not airfare (from the PrimeSport website):

Tickets (alone) to the game typically run at about $3,000 each, and those aren’t even the good seats.

Anyway, back to hotels…

Those few hotels that are offering rates on or around Super Bowl weekend require that guests book and pay for a minimum of three nights or four nights. And their rates are up nearly 500% compared to what travelers are paying this summer.

Some examples: (Please note that these rates are based on spot checks made in mid-July and are subject to change)

The Best Western Tuscan Inn in Fisherman’s Wharf will set you back $999 on Super Bowl weekend (Photo: Best Western)

The Orchard Garden Hotel (one of the few available in downtown SF) UP 540%

Superbowl weekend: $1,800/night

Aug 27-31: $281/night

Minimum stay requirement of 4 nights

Near the Airport:

A room like this at the Four Points by Sheraton at SFO is going for $1,190 per night (Image: Sheraton)

Four Points by Sheraton SFO UP 474%

Superbowl Weekend Rate: $1,190/night

Aug 27-31: $207/night

A room at the conveniently located Aloft SFO is going for $1,139 per night during Super Bowl weekend (Photo: Chris McGinnis)

Aloft SFO UP 432%

Superbowl Weekend Rate: $1,139/night

Aug 27-31: $214/night

No minimum stay requirement

The Westin SFO UP 467%

Superbowl weekend: $1242/night

Aug 27-31: $219/night

No minimum stay requirements

Doubletree by Hilton SFO UP 170%

Superbowl Weekend: $699/night

Aug 27-31: $259/night

No minimum stay requirement but full prepayment required for Superbowl weekend with no refund for cancellation at any time.

East Bay:

A room at the Pleasanton Marriott is about $500 per night (Photo: Marriott)

Pleasanton Marriott UP 248%

Superbowl weekend: $449/night

Aug 27-31: $129/night

No minimum stay requirement

A search on Kayak.com turned up a few smaller, lesser-known hotels with nightly rates over Super Bowl weekend in the $500 per night range, and I bet those will be snapped up pretty quickly.

San Francisco expects that nearly a million visitors from near and far will visit the city around the Super Bowl, but only 70,000 will actually see the game. A special Super Bowl City attraction will be set up on the Embarcadero in the large plaza in front of the Ferry Building.

A rendering of Super Bowl City in San Francisco (Image: SF SB Committee)

Would you pay the big bucks to attend the Super Bowl? Please leave your comments below.

That increase kicked Geneva, Switzerland off the top of the list where average rates are nearly $100 cheaper.

Chicago, Miami and Los Angeles now rank in the top 10 most expensive cities for hotel stays, too.

Surprisingly, New York ranks 16th, likely due to its wide range of price points, and its recent surge in new hotel openings adding plenty of supply.

The Bloomberg gauge measured 100 cities based on the average daily cost of hotels, regardless of star ratings, for two adults in a double-occupancy room.

San Francisco’s soaring rates are due to a combination of high demand due to the tech boom, and very limited supply due to high real estate and development costs.

When new hotels open, they do so on a small footprint. Some examples: The new-from-the-ground-up Hampton Inn near Moscone Center (opens July 1), and the future Courtyard by Marriott San Francisco Union Square (opening in August), will be housed in a re-vamped building near the seedy Tenderloin area of the city. It’s no wonder that Loews pounced on (and paid top dollar for) the Mandarin Oriental and Hilton nabbed the Parc 55 this year.

If you think San Francisco’s rates are high now, just wait until Super Bowl week in 2016. Right now, the Best Western Tuscan Inn in Fisherman’s Wharf is going for nearly $1,000 per night. And there’s no availability at any four or five star hotel downtown or Union Square. Out by SFO airport, the Aloft hotel is going for $1,019 per night on Super Bowl weekend.

Search on Trivago.com

How much did you pay to stay in San Francisco last time you were there?

UPDATE: The San Francisco Travel Association responded to our request for a comment on this Bloomberg report. Here’s what they had to say:

San Francisco enjoys being a top global destination for tourists and conventions, but it is NOT home to the “world’s priciest hotel rates” as indicated in a Bloomberg News story. The story used an unscientific “snapshot” survey that is inaccurate, including calculations from next year’s San Francisco-hosted Super Bowl week, a once-in-a lifetime event.

The hotel industry’s accepted standard for comparisons is the Average Daily Rate. The 2015 forecasted ADR for San Francisco is $257, which ranks third in the United States behind New York and Honolulu.

San Francisco offers a wide range of hotel accommodations for its 18 million visitors, supporting 87,000 travel industry employees and generating more than $665 million in city tax revenue annually.

Chris, if the dates the reporter selected were 30 days later, it would have been an entirely different story.

Today AT&T rolled out a new plan for international calling today that should help frequent travelers avoid frustrating phone bill surprises when returning from overseas trips. It could also push other carriers to improve their offerings for international travelers.

What’s unique about AT&T’s new Passport plan is that it is offering three different one-time packages (for $30, $60 and $120) that you can choose instead of its recurring Global Packages– a nice alternative for the occasional international traveler.

The least expensive Passport bundle goes for $30 and with it you get 30 days of unlimited messaging (text, image or video), 120MB of data, and $1 per minute calling in 150 countries. That’s plenty for a most users, but if you are busy uploading photos or sending or watching videos, there are fatter plans: For $60 you get 300MB of data and calls at .50 per minute. And for $120, you get 800MB of data and .35 per minute calls.

You’ll pay for these packages in addition to your monthly AT&T bill and the deal expires after the 30 days are up… it’s not a recurring charge. Just be sure and sign up for a plan BEFORE you take your trip. (Details about Passport plans here)

AT&T’s new Passport bundles (Chart courtesy AT&T)

AT&T likely rolled out this plan to retain customers tempted by T-Mobile’s very popular, inexpensive and aggressively marketed Simple Choice plan, which offers unlimited data and texting and .20/minute calling in 120 countries (vs AT&T’s 150 countries) for $80 a month. What’s nice about the T-Mobile plan is that you don’t have to “sign up” before each trip… the deal is included in your monthly rate whether or not you are traveling overseas. (Regrettably, T-Mobile’s coverage lags in many parts of the US and much of my home town of San Francisco, which is why I moved away from it two years ago after an 11 year run! But I’m going to give ’em another try via its new, free “test drive” promo. Stay tuned for results…)

Currently, Verizon offers a $25 global data plan that provides 100MB of data overseas, but doesn’t offer free messaging or discounts on voice calls. Plus you have to sign up for it before each trip. Maybe AT&T’s new offer will push Verizon to offer a more streamlined and lucrative deal to retain its frequent traveling customers. Stay tuned….

What mobile carrier do you use? How would you rate its international coverage– and its pricing for international calls and data?

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Did you get a shiny new iPhone or smart phone for Christmas? Are you worried that it might cost you a fortune if you dare to turn it on overseas? In this guest post, longtime TICKET reader Jim Braude offers some excellent tips for staying connected when overseas– whether you use an iPhone or an Android device. Braude divides his time between Atlanta and Paris managing a delightful collection of guest apartments in both cities that he rents to travelers.

Learn From My Mistakes!

The first time I came here [to France] with my iPhone I didn’t pay attention to details or warnings, resulting in an $1800.00 bill after just two weeks. Now I’ve learned the tricks and happy to share them with you. — Jim Braude, ourhomeinparis.com

1 – Use the wi-fi! Most hotels and all of our apartments have unlimited wi-fi use. Of course, it makes sense to do as much data transfer as possible using the wi-fi network, as it’s the 3G that nails you if you go over your limit (see next point). More coffee houses are adding wi-fi too as a free perk, but be careful if non secured.

2 – AT&T has three features that greatly reduce the bill:

>Global messaging – 200 international text messages for 30.00

>International roaming – data – 125MB for $49.99 – this is greatly reduced recently. If you use it with ONAVO (see below) it’s more than enough for a once-an-hour check of emails for a full month.

>International roaming – voice – $5.99. Cheaper long distance to the US. But I use SKYPE when on wi-fi instead, which is even cheaper.

5 – PHONE TAG – for $9.99/month. I forward my incoming voice calls to my phonetag number, it then computer-generates a voice to email message, and sends me an email. This also makes it unnecessary to check voice mail which I prefer. It’s not perfect– occasionally the computer will make some odd choices in its translation from voice to text– but it includes an attachment of the actual voice message that you can listen to if needed as a back up.

6- CHANGE SETTINGS. Change how often your phone checks for email from every fifteen minutes to every hour during the day and change to MANUAL setting at night unless you have wi-fi setting and wi-fi remains on 24/7.

7- WHATSAPP– an almost free app (99 cents) for international texting, works great [across iPhone, Android and Nokia platforms].

8 – GET AN APARTMENT – when a homeowner gets cable service in France, it costs only 5 euros more per month for the owner to add unlimited free calling to the US or Canada from a fixed line. Warning: some carriers do NOT allow free calls to mobile phones–only to fixed lines– so confirm that first. And confirm whether the country you are calling is on the free list. When you install cable (and wi-fi and phone) in your apartment, calls to the US and Canada are almost always free, from both both fixed line and mobile.

9 – PICKPOCKETS – the number one most stolen item in France is the iPhone. DO NOT leave it on a table top at a cafe. A young man covered mine with a newspaper as he asked me a question and took my iphone away in seconds, but I caught him in the act. Avoid using on the subway as you are alerting those around you that you are a prime target. Never leave your iphone in backpack or purse that is behind you rather in front of you.

Do you have any other money-saving or hassle-reducing tips on using your mobile phone overseas? If so, please leave your advice in the comments box below!

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